Trading AUD/USD

Written By

James Barra

Edited By

Jemma Grist

Fact Checked By

William Berg

Updated

Jan 15, 2026

The popularity of the AUD/USD currency pair, otherwise known as the ‘Aussie’, has surged in recent years. As a result of Australia’s commodity boom in recent decades, the pair now unites two expanding and influential economies. This page will break down everything you need to know about the AUD/USD pair, from its benefits and drawbacks to currency correlations, history and strategy, including trading hours, signals, charts and top tips.

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Breaking Down ‘AUD/USD’

Before we get into the details, what precisely does AUD/USD mean? Quite simply, the exchange rate tells you how many US dollars (the quote currency) are required to purchase one Australian dollar (the base currency).

In the BIS Triennial Central Bank Survey (April 2025), USD/AUD accounted for about 4.9% of global FX turnover, placing it among the world’s most-traded currency pairs (top 10). However, it is not one of the six currencies in the ICE U.S. Dollar Index (USDX/DXY) basket (EUR, JPY, GBP, CAD, SEK and CHF).

Why Day Trade AUD/USD?

Before we consider AUD/USD day trading strategies and fundamental analysis, why should you opt for this particular currency pair when there are so many options currently available?

Volatility – As a result of the high-interest rate differential between Australia and the US, day traders can benefit from high levels of both volume and volatility. This could mean greater opportunities to turn profits. In bull markets, the AUD/USD pair run upwards much quicker than other pairs, whilst in bearish market environments, it can drop much sooner.
Major currency performance – AUD/USD can experience large multi-year swings. For example, the AUD has risen or fallen by 30%+ versus USD over various cycles in the historical exchange-rate series.
Economic stability – Data has shown the Australian economy has surged through exports and commodities, whilst retaining a solid foundation with a central bank. Australia had a long run of growth with only brief slowdowns, but GDP fell during the COVID period (eg, 2019–20 in the ABS national accounts).
Trading relations & GDP – Australia slowed during the Global Financial Crisis but did not fall into recession; multiple factors are commonly cited, including policy support and ongoing demand for commodities (including from China).
Diverse market – Due to the AUD/USD’s increasing popularity, individuals can benefit from a number of different trading vehicles, from ETFs to E-micro futures, options, and more.
Research and resources – Daily and weekly analyses are far easier today thanks to the range of resources available. Websites and forums offer market overviews and analysis. Sophisticated live streaming charts and graphs are now highly customisable. You can get bespoke indicators, as well as 1-minute, 5-minute, 15-minute, and 1-hour charts.

Drawbacks & Risks

Despite AUD/USD statistics demonstrating promising growth and attractive trends, there remain several drawbacks and risks to trading with this currency pair.

Stability misconception – Traders often take for granted the power and stability of the US economy over other economies, such as Australia. However, because this pair reflects two economies (Australia and the US), you need to track both sets of data and policy expectations. Not keeping up-to-date with political and economic sentiments in both could lead to costly mistakes.
Volatility – Part of the allure of the AUD/USD currency pair is the promise of volatility. However, these sharp moves can also lead to significant losses. So, if you do invest substantial capital into this pair, one of the top trading tips is to employ an effective money management system.
Leverage – Margin trading allows you to borrow funds to maximise your position. But whilst this may bolster potential profits, it could also amplify losses.
Automated competition – You may have attractive bid-ask offer spreads and all the bar charts and graphs in real-time in front of you. However, you are now competing with more sophisticated trading algorithms than ever before. This means asserting an edge when you’re live chart investing is increasingly difficult.

Influences on Movement

By reviewing the AUD/USD relationship through long-term data, it is clear that there are several main factors that influence prices. These include:

Commodities & Trading

Commodity prices – The Australian economy, to a certain extent, is shaped by its significant role in commodities. Australia is a major exporter of commodities (especially iron ore and coal), and changes in commodity prices can influence the AUD. So, when commodity prices rise, the Australian dollar often strengthens. When there is a fall in the price of commodities, the Australian dollar weakens. During the 2015 commodity downturn, AUD weakened sharply versus USD (roughly >15% peak-to-trough in AUD/USD), and AUD/NZD briefly approached parity, levels not seen for decades.
Trading relations – This is particularly important for the Australian dollar. The Australian economy is closely linked to trading relationships in Asia. So, changes in commodity demand from China, India, and, to some extent Japan, can all cause the strength of the Australian dollar to increase or subside.

Other Influences

Interest rate differential – Changes in interest-rate expectations for the Fed and RBA can move AUD/USD, especially when markets reprice the expected policy path.
Economic indicators and data – Price action often centres around the release of key economic data and indicators. So, news announcements and reports on GDP, retail sales, inflation, trade balances, and industrial production can all trigger movement in the AUD/USD currency pair.
Inflationary pressures – Commodity prices can affect inflation and growth expectations globally. Because AUD is often treated as ‘commodity-linked’ and pro-cyclical, shifts in commodity prices and global risk sentiment can change demand for AUD (though relationships vary over time).
Political announcements & natural disasters – Major political elections, new policies, wars, terrorist incidents, plus natural disasters, can all lead to serious fluctuations within the AUD/USD.

So, whilst day trading the AUD/USD pair calls for technical analysis via daily, weekly, and monthly price charts, it also demands an understanding of the underlying economic forces at play.

Currency Correlations

Part of your AUD/USD trading view also needs to take into account relevant currency correlations. The successes and failures of certain pairs will influence others.

Correlation is a measure ranging from -1 to +1, which determines whether the pair is positively or negatively correlated. Correlations can also change over time.

Correlation describes how two instruments have tended to move together over a given time window (and it changes over time). Some USD-quote pairs (like EUR/USD and GBP/USD) often show positive correlation, and some pairs can move inversely, but this is empirical and time-varying, not guaranteed by whether USD is the base or quote currency. Use a rolling correlation tool (e.g., 30–90 days) before relying on any relationship.

Note that the correlation with the USD/CAD pair may also be partly attributed to the positive correlation between the Australian and Canadian economies, as both are heavily involved in commodity exports.

Gold Correlation

Another important area is AUD/USD correlation with gold. AUD is often described as a ‘commodity currency’, so AUD/USD can sometimes move with broad commodity prices (including gold). But the relationship is not stable: correlation can weaken or flip depending on risk sentiment and interest-rate expectations. Treat gold as one input, not a standalone signal.

What does this mean for you? Gold can be a helpful cross-check because AUD is often described as commodity-linked, but correlations are unstable. If you use it, check rolling correlations (eg, 30–90 days) and treat it as one input alongside rates and risk sentiment.

AUD/USD Day Trading Strategy

Regardless of whether you opt for a breakout or scalping strategy, there are several factors to consider below that could enhance your intraday trading performance.

Timing

Regardless of what strategy you use for live, online AUD/USD day trading, knowing the best time to trade could make all the difference to your end-of-day profits. Spot FX trading effectively runs 24 hours a day during the workweek (commonly from Sunday evening to Friday evening, depending on time zone), but it is generally closed on weekends.

You will find the biggest daily moves and greatest volume during Australian working hours (overlapping with the Asian trading session), plus during the most active US trading hours. Economic reports, such as non-farm payrolls, durable goods orders, and consumer inflation data, can also all trigger significant spikes and shifts.

Liquidity and volatility are usually highest during major market-session overlaps, especially the London–New York overlap, and can be thinner during late US/early Asia hours. Exact ‘best’ times vary with daylight saving and the economic calendar.

News

There are a number of different approaches you can take to day trading on the AUD/USD currency pair. Some will utilise historical price charts and basic daily charts, whilst others will make their expectations based on news updates.

Market sentiment and price action can quickly shift with breaking news. If you can anticipate where the trend will head, you can capitalise on these news updates.

To do that, you need to have reliable news resources you can turn to. Some of the most highly regarded include XE, CNBC, Reuters, Bloomberg, Forex Factory, Yahoo Finance and Google Finance. These can prove invaluable. On top of standard AUD/USD commentary and the latest technical analysis, they can also offer the following:

Exchange rate history
Predictions and forecasts for today
Daily and monthly moving averages
AUD/USD specific trading definitions
Long-term charts, averages and outlooks
Daily, weekly, and monthly data and forecasts
1-year, 5-years, 10-years, 20-years, and 50-years charts
Short-term AUD against USD trend predictions and forecasts

Many of the above sources will also have obscure trends and unusual daily moves explained by experienced FX traders. So, used correctly, the news today is a powerful weapon to add to your day trading arsenal.

Example

Breakout strategies are often thought to be effective techniques for capitalising on fluctuations when the AUD/USD currency pair is considered so volatile. After monitoring support and resistance, positions should be entered in anticipation of a break. If the price continues in this direction, you can hopefully profit.

Reversal at Support/Resistance

Look no further for a straightforward AUD/USD day trading strategy. Support or resistance could be a horizontal or diagonal line, but it is the point at which the price has reversed off at least twice before. This should include the starting point of your support/resistance line.

It’s worth noting that support and resistance are usually areas, instead of specific prices. So, your trade setup can actually take place slightly above or below.

The support and resistance then tell you to be ready because a reversal or breakout could be fast approaching. You would then need to wait for consolidation near your support/resistance. If the price breaks above a consolidation near support or breaks below a consolidation near resistance, then you have your trade signal.

When the reverse signal does then occur, take your trade when the price moves just above the consolidation near your support, or just below the consolidation near your resistance. If your AUD/USD pattern does indeed appear, you are anticipating that the price will ricochet off support or fall off resistance.

However, if the price fails to do that and instead breaks above the major resistance area or breaks below the major support area, then you should exit the trade as soon as possible.

Risk Management

AUD/USD discussions often focus on buy and sell rates, hourly forecasts, opening and closing positions, and daily ranges, but not on how to mitigate risk. It doesn’t matter if it’s the lowest or highest-ever historical prices today; without an effective money management system, you may not still be in the game next week.

So, what precisely is an AUD/USD risk system? Its meaning is simple. It is a way of protecting against losses by pre-determining position size. Most traders recommend risking no more than 1-2% of your account balance on a single trade.

For example, if you have $10,000 in your account, you wouldn’t bet more than $100 to $200 on a single trade. That way, even if you lose, you still live to fight another day. This basic technique could prevent you from sinking into the red.

As famous trader Paul Tudor Jones asserted, ‘risk control is the most important thing in trading.’

So, forget closing prices, buy/sell spreads and picturesque candlestick charts; sit down and determine your risk parameters first. Moving forward and capitalising on the next rally with promising pip movement will be far easier if you still have capital left in your account.

Last Word on Strategy

Whatever your trading plan involves, from daily pivot points to scalping, employ your strategy at the most effective time. Plus, take into account the latest news updates and breaking announcements that may help you predict future price movement.

History

Early History

For much of the 20th century, Australia operated under various fixed/managed exchange-rate arrangements (including links to sterling and later the US dollar).

Australia moved through several regimes in the 1970s, and the Australian dollar was ultimately floated in December 1983, after which AUD/USD became a true market-priced exchange rate.

Australia also introduced decimal currency (the Australian dollar) in February 1966, replacing the Australian pound.

Recent History

Many traders do not realise how much the AUD/USD and the forex outlook of today are shaped by past events. Understanding the context of this currency pair’s relationship may allow you to make more accurate exchange rate forecasts and predictions.

The Australian economy and the popularity of trading Australian dollar currency pairs have increased in recent years. In the BIS April 2025 survey, USD/AUD accounted for about 4.9% of global turnover, keeping it among the most traded currency pairs worldwide. A stable trading relationship with China, high-interest rates, plus commodity-exporting are partly to thank.

Australia experienced a long run of growth with only brief slowdowns, but GDP fell during the COVID period (2019-20).

For the most part, minimal intervention from the RBA in the last ten years has attracted huge numbers of FX traders to the AUD/USD currency pair. However, surprisingly strong reversing trends when central banks make unexpected announcements can lead to traders suffering substantial financial losses.

Role of the Australian Dollar

An important element of AUD/USD trading economics is recognising the role of the Australian dollar. Currency forecasts will reflect Australia’s economic influence.

Australia is a large advanced economy. The World Bank reports Australia’s nominal GDP at about US$1.76 trillion in 2024, and services at roughly 66% of GDP (latest available data). Their most influential services include finance, media, education, and logistics.

However, as touched upon elsewhere on this page, the Australian dollar is a commodity-based currency. For example, you will see a high correlation with the prices of exported commodities, from coal and iron to copper and gold. The strength of the Australian dollar vs the US dollar is tied to the success of their exported goods.

So, the Australian dollar plays a huge role in international trade. As such, to make accurate predictions on your live forex chart, you should consider the following key indicators:

GDP
Trade Balance
Employment Change
Consumer Price Index (CPI)
Producer Price Index (PPI)

In addition, to find reports on their grain commodities, see Australia’s Bureau of Agricultural and Resource Economics and Sciences (ABARES). Online, you will find free data on crop planting, weather, harvests, mine output, plus other grain commodity statistics.

The Australian dollar also now plays an important role in the forex space. In the BIS April 2025 survey, the Australian dollar was on one side of about 6.1% of all FX trades.

So, the Australian dollar plays a vital role in international commodities trading, as well as forex trading. Plus, the Australian economy is one of the few large advanced economies rated at the top tier by major agencies (for example, Australia is rated AAA by S&P and Fitch, and AAA by Moody’s). This further highlights its political and economic stability. All of these factors will continue to attract aspiring AUD/USD traders.

Role of the US Dollar

You cannot make accurate daily forecasts, let alone 3-month or 12-month AUD/USD forecasts, without understanding the crucial role the US dollar plays. In 2024, the US GDP was roughly 26% of global nominal GDP.

After China, the US is the second-largest trading nation in the world as of 2022. The US is one of the world’s largest manufacturing economies by value added, second only to China in many comparisons.

Below are just a few of the vital roles the US dollar plays:

Many global banks hold currency reserves in the US dollar.
The US dollar is on one side of about 89.2% of all FX trades as of 2025.
The US dollar is one of the most popular currencies used for international transactions.
Global crude oil benchmarks are commonly priced in US dollars, and many international oil trades are invoiced in USD.
Some countries peg their own currency to the value of the US dollar, whilst others adopt the US dollar entirely.

When you consider the staggering size of the US economy and its numerous strengths, it’s straightforward to see how economic data on the US can impact the forex marketplace, and in turn, the AUD/USD currency.

Some of the top economic indicators that influence live FX exchange rates include Trade Balance, Consumer Price Index (CPI), Producer Price Index (PPI), Retail Sales and Consumer Confidence.

Your AUD/USD technical analysis should consider many of these data releases in the economic calendar. In addition, the Federal Open Market Committee meetings are held periodically each year, with press conferences, expectations and forecasts released every few weeks. Each announcement could potentially trigger shifts in the AUD/USD currency pair.

Final Word on AUD/USD Trading

The AUD/USD promises day traders all the attributes needed to generate substantial profits, including rich liquidity and volatility. However, this hunting ground comes with tough competition, so asserting an edge will require a number of elements.

Because it’s one of the seven major pairs that contain the US dollar, staying aware of both monetary policy and interest rates set by the Fed and RBA is crucial. Careful technical analysis, including real-time charts and the news, will all be needed to capitalise on those bullish or bearish patterns. Just as important, though, is finding the best forex trading platform for your individual needs.

FAQs

What Is AUD/USD?

AUD/USD is among the most actively traded currency pairs globally (top 10 in the BIS April 2025 survey). The exchange rate determines how many US dollars are needed to purchase one Australian dollar. AUD/USD is also a ‘major’ pair, which means it includes the US dollar, is traded in high volumes and is highly liquid.

Why Should I Start Trading AUD/USD?

Since the Australian dollar is one of the highest-performing major currencies, the AUD/USD pair enjoys high liquidity and volatility. The pair is also positively correlated with several other currency pairs, as well as commodities such as gold.

What Is The Best Trading Strategy For AUD/USD?

The best trading strategy for AUD/USD ultimately depends on each individual trader. With that said, it’s always important to consider the optimum times to trade AUD/USD, as well as the best new resources for fundamental analysis. Whether you’re conducting Elliott Wave analysis or support and resistance strategies, make sure to always implement proper risk management.

Where Can I Trade AUD/USD?

As it is one of the most popular major currency pairs, you can trade AUD/USD at virtually any online forex broker. To start analysing current AUD/USD charts and begin trading, you will need to register at your chosen broker and sign in to the trading platform.